In his guest essay published in the New York Times, "The 1970s Gave Us Industrial Decline. AI Could Bring Something Worse," Dr. Carl Benedikt Frey makes some compelling points.
Sadly, his perspective is too myopic and focused on the immediate, especially his commentary on Boston versus Detroit.
Boston has Harvard and MIT; of course, it should be winning in the global knowledge economy. But here are three reasons why Detroit is better positioned than Boston in the long run:
1) Manufacturing expertise meets AI implementation - Detroit has deep-rooted manufacturing expertise and established supply chains. For AI to be successful at scale, it needs to be built and deployed in physical systems. Detroit knows how to build, manufacture, and scale production—critical capabilities as AI transitions from research labs to real-world applications in everything from autonomous vehicles to smart manufacturing systems.
2) Lower cost structure enables innovation - Detroit offers significantly lower real estate costs for both commercial space and employee housing compared to Boston's premium market. These lower costs allow for greater risk-taking and innovation by freeing up capital that would otherwise go to overhead, enabling companies to invest more in R&D and experimentation.
3) Strategic position in a massive regional economy - Detroit's location in the Global Great Lakes provides excellent access to Canadian markets and the industrial heartland of the Midwest. Detroit sits at the heart of the Global Great Lakes economy, which collectively represents an economic powerhouse larger than Germany's entire GDP.
-Marc
